Telefonica has improved its offer for a telecom group's German mobile network operator, having won support from the group's biggest shareholder, America Movil.
America Movil, which owns 29.77% of KPN, said it backed Telefonica's new offer for E-Plus, while it still plans to go ahead with its separate €7.2bn (£6.2bn) cash bid for the remaining shares in the Dutch group.
Telefonica has offered to pay KPN €8.55bn for E-Plus, a 6% increase on the €8.1bn it had offered in July.
KPN is expected to receive €5bn in cash for E-Plus and a 20.5% stake in the Telefonica's German business, compared with the 17.6% it had previously offered.
Telefonica, which is trying to sell O2 in Ireland, said it expects the deal to generate up to 5.5bn in cost savings.
The deal also moves the group closer to its goal of rivalling to market leaders Deutsche Telekom and Vodafone.
However, Telefonica still needs to win support from antitrust regulators and unions.
Pedro Oliveira, analyst at BPI, said America Movil's support increased the odds of the deal getting past the regulator.
"We continue to stress that the operation is subject to regulators' approval and despite the support of America Movil there are still risks for the operation and to the value of the operation," he said in a note.